Canadian Management Centre's Training Blog

Copenhagen Has Highest Net Real Wages

According to a 2006 study of wages in 71 cities on six continents, global finance company UBS says that Denmark's capital city, Copenhagen, boasts the highest net real wages in the world. Northern European cities dominated the top of the list, with Oslo second, Zurich third, and Geneva fourth. New York was the highest-ranking U.S. city at number five, and Chicago was seventh behind London. India did not fare as well, with Mumbai ranking 67th and Delhi coming in at number 70. The highest-ranking city in Asia was Tokyo at number 18, while the rest of the Asian cities ranked below 30. ("2006 UBS Study 'Prices and Earnings'" [UBS AG], press release, August 9, 2006)

Indian Salaries Rose by an Average of 14%

Salaries in India rose steadily in 2005, with increases similar to those seen in 2004. This represents a leveling of off the growth seen in previous years. According to a survey by Hewitt Associates, India's strong economic growth pushed wages up an average of 14.1% in 2005. Domestic companies have joined the fight for talent sparked by multinationals, increasing wages by 14.7%, while foreign-owned companies had an increase of 13.8%. The strongest wage growth was found at the professional/technical level, with these workers seeing an increase of 15.4% in 2005. Asset management companies provided the highest increases, with an average of 17.1%, while nonprofit organizations increased the least with 9.5%. Almost all of the companies surveyed (99.5%) indicated that they have formal performance management platforms, and 89% reported the use of variable pay plans. These results indicate a strong move toward tying pay to performance. ("Salaries Stabilize in India" [Hewitt Associates], press release, February 7, 2006)

What Motivates Japanese Workers

A researcher has found that Japanese workers tend to be more motivated by promotion opportunities than by wage increases. In a study of 1,823 workers from 75 companies of Toyota Group, researcher Kiyoshi Takahashi attempted to find out how much motivation was provided by variables like wage levels and promotions. He also studied the effects of job characteristics on motivation, such as the range of responsibilities, the range of discretion, the skills required and the opportunities for development. Not surprisingly, wage increases motivated the workers, as well as having a wage level higher than that of co-workers. Takahashi also found that a promotion incentive was a strong motivator and that when the promotion system was perceived to be fair, it was a stronger motivator than wages were. One interesting find was that when workers perceived that promotions were difficult to come by, it did not reduce motivation. As for the aspects of the job itself, jobs requiring a lot of skill or knowledge that had both wide ranges of discretion and development opportunities provided strong motivation. Jobs that had a wide range of responsibilities, however, provided no additional motivation. (Career Development International [Takahashi], February 2006, pp. 193, 195-199)

Generation Y Taps into Networks to Find Jobs

Appealing to job applicants of Generation Y (born between 1984 and 2001) may require employers to move beyond traditional recruiting methods, according to an April 2006 CMA Management magazine article by recruiting consultant Jeremy Miller of the LEAPJob consulting firm. Noting the generation's reputation for technological expertise, quality education and interest in achievement, Miller also points out that Gen Y individuals tend to be skeptical of the media, instead looking to their social and professional networks for information. Accordingly, employers may find it easier to reach Gen Y job-seekers through their peers who already are employees. Miller suggests that employers devise specific message content for employees to use in recruitment outreach. Access to Gen Y job-seekers also may be gained through their parents, who tend to maintain close ties with their children and participate in job searches. "To really tap into Generation Y requires a refined marketing strategy," says Miller. (CMA Management [Miller], April 2006, pp. 13-14)

Global Teams Need to Be Managed Better

Global teams are becoming an integral part of most businesses, and researchers from consultant Deloitte Touche Tohmatsu suggest that companies need to adopt a strategy that encourages and supports these teams. Deloitte Touche Tohmatsu senior executives James H. Wall and Lynda Spielman suggest that first there needs to be a commitment to managing global teams; simply gathering a group of people and telling them they are on a team is not enough. The inherent diversity in global teams requires management in order to maximize the creativity diversity can create. Wall and Spielman say that global team leaders need to be selected carefully, as it can be much more difficult than leading a traditional team. Ideally, the leader would have some global experience. Many companies have employees that have worked in other countries and could apply that experience to a global team. Global teams need the proper tools and adequate resources, as well as clear communication on expectations. Cross-cultural training is imperative for team members. Once a team is assembled and the work has begun, the team needs time to work together before producing results. Hurried deadlines can lead to unmanageable conflict and poor performance. Trust and understanding need to be developed, and that takes time. A Deloitte study says that 67% of team members believe that most learning takes place while working on the task, and only 10% indicated that they learned the most when someone was explaining something to them. (China Staff [Wall and Spielman], March 2006, pp. 8-10)

Most Workers Stay in Jobs They Don’t Like

In 2006, 81% of employees said that people remain in jobs they don't like simply for the sake of having a job, according to a survey conducted in spring of that year by the staffing firm Randstad. The organization polled 1,264 employers and 1,642 employees across the country and found that 69% of employers thought workers held onto jobs they disliked for the same reason. About two-thirds of workers responding to the poll said they expected to remain with their current employers through the year. Randstad noted that the remaining third of employees did not express intentions to stay. Of the employees responding to the poll, 86% told Randstad that their happiness on the job depended on their employers letting them know that they were valued. At the same time, only 37% of the workers said that their employers did so. (Workforce Management Online [Larson], August 2006)

Expert Foresees Greater Emphasis on Quality in HR Outsourcing

As the first wave of human resources outsourcing (HRO) matures, attention will shift from cost-savings to innovation and quality of services, predicts Scott Gildner, HR sourcing expert. A 2005 Towers Perrin study of 47 companies found that though most employers are realizing cost-reduction goals, outsourced HR services are not receiving high marks for quality: Fewer than 30% of companies polled said they experienced hoped-for levels of quality satisfaction after two years of HRO operations. Nevertheless, Gildner foresees quality improvements in the near future as the industry stabilizes and continues to minimize counterproductive practices. Companies will then be able to expand HRO services, says Gildner, into the areas of talent development, performance evaluation and benefits administration, assisted by a long list of quality-enhancing strategies, including surveys, performance reviews and e-learning options. (HRO Today [Gildner], April 2006, p. 86)

Prestigious Colleges May Not Be Any Better

"We haven't found any convincing evidence that selectivity or prestige matters" in comparing the educational quality of colleges, says University of Iowa professor Ernest T. Pascarella, one of the authors of How College Affects Students. His opinion is based on the research for the book, described by Newsweek as "an 827-page evaluation of hundreds of studies of the college experience." Pascarella also conducted a study, with Indiana University's George Kuh, that compared standards of teaching and found that "selective schools don't systematically employ better instructional approaches than less-selective schools." (Newsweek [Samuelson], August 21, 2006)

HR Benchmarking Has Drawbacks

In most cases, attempting to benchmark quality by comparing time and costs accruing to internal support or shared services is akin to comparing "apples and oranges," argues Robert S. Kaplan, Baker Foundation Professor at Harvard Business School. Benchmarking is appropriate when comparing similar, measurable processes involving the same number of multiple units, as in comparing the amount of time or costs needed to produce anything that can be commoditized, says Kaplan. But benchmarking HR services like leadership and performance management, as well as finance, IT and other support or shared services, has severe limits as it wrongly assumes that "both the quantity and quality of outputs are comparable among all participating entities." Another drawback: Benchmarking typically compares only initial program costs without taking into account variations in company strategies and resulting cross-departmental value-creation, which, in fact, may often represent a very high return on investment. (Working Knowledge [Kaplan], January 9, 2006)

“Best Companies” Invest in Employee Relations

Greater investment of time and money into HR employee relations and performance management characterizes top-ranking companies, according to a white paper released by The Benchmark Partners. Examining top scorers in Fortune magazine's 2005 annual list of "100 Best Companies to Work For," the study found that high-benchmarked firms devote 68% of HR staff time and 42% of HR budgets ($2,412 per worker) to employee relations practices and processes; technology monopolizes 11% of HR spending, exceeding the average corporate outlay by 58%. By investing just 0.02% more of their gross earnings than the average business spends on these HR issues, top Fortune-magazine companies garner more effective 24-hour HR service delivery and a much higher return on investment: a 15.61% ROI compared with the 4.79% Standard & Poor's 500 (report) ROI, as determined by a Russell Investment Group study of high-ranking Fortune companies from 1998 to 2004. (Best Practices in HR, February 18, 2006, p. 5)